Alerts

   Denise Joaquin

November 14, 2022. Rolling over estimates to 2023; maintain BUY. We are raising our FV estimate on RRHI to Php89.4/sh as we roll over our estimates to 2023 and maintain our BUY rating on the stock. We continue to like RRHI given its well- diversified portfolio of retail formats and positive long-term growth prospects. We think its recovery initiatives, especially the strengthening of its e-commerce platform, makes RRHI well-positioned to capitalize on future growth opportunities amid increasing digital trends.

   George Ching

November 11, 2022. Maintaining HOLD rating. Following the rolling over of our estimates to FY23, we are raising our FV estimate for JGS by 2.1% to Php56.38/sh. We are maintaining our HOLD rating on JGS. We like JGS as it is well positioned to capitalize on the favorable long term growth outlook of the Philippine economy given the market leadership position of its operating subsidiaries, the parent company’s strong balance sheet and the excellent track record of its management team. However, it is also sensitive to the ongoing rising interest rate and rising inflation environment as vulnerable sectors accounted for 61% of NAV.

   George Ching

Maintain BUY rating- November 11, 2022 Following the rolling over of our estimates to FY23, we are raising our FV estimate for NIKL by 5.2% to Php7.26/sh. We are maintaining our BUY rating on NIKL. We continue to like NIKL given that prices for nickel will continue to be supported by the ongoing Indonesian nickel ore export ban, as well as the proposal by the Indonesian government to impose a levy on the export of some nickel products. We also remain positive on the long term outlook for nickel due to the rising EV battery demand. Furthermore, we believe that NIKL’s expansion of its RE power generation business comes at an opportune time given the strong cash flow generation of its nickel mining business, as well as the tightening of power supply in the country. NIKL’s share price has declined by 44% from its peak in March is currently trading at 6.9X 2023E P/E. At the current price of Php5.36, there is a 35.5% upside to our FV estimate.

   Richard Lañeda, CFA

Maintain BUY with FV estimate of Php973- November 10, 2022 We reiterate our BUY rating on SM given its robust earnings growth despite global headwinds. There is strong momentum in consumer spending which will benefit SM Retail and the malls of SMPH. Meanwhile, banks continue to have strong balance sheets and delivered strong core business growth. Meanwhile, the acquisition of PGPC has proved to be accretive to SM’s bottom line and looks to increase value contribution from its five new geothermal areas.

   George Ching

Reiterate HOLD rating- November 10, 2022 Following the rolling over of our estimates to FY23, we are raising our FV estimate on ACEN by 10% to Php5.56/sh. We are maintaining our HOLD rating on ACEN. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~3,704MW currently, the company is on track to grow its attrib- utable capacity to 5,000MW by FY24, and the capital raised from the recent FOO should help the company achieve this goal. However, valuations are still not attractive at current market price. At Php6.02/sh, ACEN is trading at 23.6X FY22E P/E, which is significantly above the 17X average 22E P/E of local power companies.

   George Ching

November 10, 2022. Maintaining BUY rating on MPI. Following the rolling over of our estimates to FY23E, we are increasing our FV estimate for MPI by 4.6% to Php8.47/sh. We believe that investor sentiment should improve with the upcoming completion of Maynilad’s rate rebasing exercise as this improves earnings visibility going forward and ease regulatory concerns. Based on MPI’s current market price of Php3.64sh, the company is trading at a 63% discount to its NAV which implies that Maynilad and its toll road business are already worthless. MPI is also trading below its 47.5% stake in Meralco(equivalent to 169% of MPI’s current market capitalization).

   George Ching

November 10, 2022. Maintaining BUY rating on DMC. Following the rolling over of our estimates to FY23E, we are increasing our FV estimate for DMC by 5.6% to Php14.6/sh. We are maintaining our BUY rating on DMC. DMC is trading at 2022E P/E of 3.3X, below its historical P/E of 11.2X. Based on its actual 2022 cash dividend of Php1.20/sh, this provides a very high dividend yield of 12.7%. Upside to our FV estimate is also very high at 55%.

   Richard Lañeda, CFA

November 10, 2022. Raising FV estimate to Php26.00, maintain BUY. We are raising our fair value estimate for RLC from Php25.60 to Php26.00 as we rollover to FY23 estimates and adjust net debt value. We maintain our BUY rating on RLC as it will also be a major beneficiary of the ongoing recovery. Mobility and domestic travel are going back to pre-COVID levels and this will continue to benefit RLC’s mall business and hotels while its office segment continues to enjoy high occupancy rates. Meanwhile, RLC maintains a positive outlook on its residential segment, despite higher cancellations this year due to the impact of COVID-19, as its net take-up sales have seen four straight quarters of sequential growth. Lastly, RLC has consistently bought back its shares in the open market since approving its Php3 Bil share buyback program, confirming our view that shares are undervalued. Our fair value estimate of Php26.00 for RLC is based on a 35% discount to our NAV estimate of Php40.00. Aside from being undervalued compared to our fair values estimate, RLC is also cheap on a relative basis. RLC is currently trading at a FY23 P/E of 8.5X, which is a deep discount to its long-term average of 15X.

   Richard Lañeda, CFA

November 09, 2022. Rolling over to FY23 estimates, maintain BUY. We are raising our FV estimate on ALI from Php36.80 to Php40.00 as we roll over to FY23 estimates. We maintain our BUY rating on ALI as our reduced fair value estimate implies a significant upside of 53.8% from its current price of Php26.00. While earnings growth may face several headwinds including inflation, higher interest rates, and global economic slowdown, we continue to see great value in Ayala Land as they continue to be the biggest developer of estate projects in the Philippines and continue to create value from their landbank through superior master planning of estate projects. ALI’s vast landbank, expertise in value-creating estates, and growing portfolio of office, malls, and hotels, make the company an attractive investment.

   Richard Lañeda, CFA

November 09,2022. Raising FV estimate to Php10.50, maintain BUY. We are raising our FV estimate for BLOOM from Php9.50 to Php10.50 as we roll over to FY23 estimates. We still like BLOOM as the primary gaming play in the Philippines. BLOOM has a market-leading position in mass gaming, supported by the growth in its premium mass segment and slots. Meanwhile, the VIP segment is making remarkable recovery as it does so without much contribution from Mainland Chinese players as borders of China remains effectively closed. We believe our new fair value estimate of Php10.50 is still conservative in that it implies a 2023 EV/EBITDA multiple of 10.7X versus the current regional peer median of 13.5X. BLOOM is priced relatively attractive as it is currently trading at 39.5% discount to the regional average 2023 EV/EBITDA.